IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER &

SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 6364/Mum/2024 (Assessment Year: 2010-11)

Assessee by None Revenue by Shri Surendra Mohan, SR. DR Date of Hearing 19.01.2026 Date of Pronouncement 22.01.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM:

This appeal is filed by the Revenue against the order dated

09.10.2024 passed by the learned Commissioner of Income Tax (Appeals), Addl./JCIT(A)–1, Coimbatore [hereinafter referred to as “CIT(A)”], under section 250 of the Income-tax Act, 1961[hereinafter referred to as “the Act”], for the assessment year

2010–11.

Facts of the case

2. The assessee is an individual engaged in the business of trading in plywood, timber and laminate sheets. The assessee filed his return of income for A.Y. 2010–11 on 28.09.2010, declaring total income of Rs. 54,73,590/-.The return was processed under section 143(1) of the Act. Subsequently, the case was selected for scrutiny and an assessment was completed under section 143(3) vide order dated 30.01.2013, determining total income at Rs. 54,73,590/-.Thereafter, on the basis of information received from the Directorate of Income Tax (Investigation), Mumbai, the assessment was reopened under section 147 of the Act. An assessment order under section 143(3) read with section 148, dated 03.03.2014, was passed, assessing the total income at Rs. 58,68,037/-.

3. Subsequently, based on further information indicating that the assessee was a beneficiary of accommodation entries in the nature of bogus purchases from hawala operators, the assessment was again completed under section 143(3) read with section 147 vide order dated 17.03.2016, passed by the Assistant Commissioner of Income Tax, Circle–29(1), Mumbai [hereinafter referred to as “Assessing Officer”].

4. In the said assessment order, the Assessing Officer recorded that information was received from the DGIT (Investigation), Mumbai, that the assessee had obtained bogus purchase bills aggregating to Rs. 9,26,170/- from the following parties:

i. M/s Kwality Enterprises – Rs. 3,24,788/-

ii. M/s Supreme Sales – Rs. 2,06,395/-

iii. M/s Dezens Associates – Rs. 3,94,447/-

5. The Assessing Officer noted that the TINs of the said parties were found to be cancelled by the Sales Tax Department, Maharashtra, and that statements of the said parties recorded by the Sales Tax authorities revealed that they were engaged in providing accommodation entries without actual supply of goods. 6. During the assessment proceedings, the assessee was called upon to substantiate the genuineness of the purchases by furnishing documentary evidence such as delivery challans, transport receipts, octroi receipts, stock records, etc. The assessee submitted that payments were made through banking channels. The Assessing Officer, however, held that mere payment through banking channels does not establish genuineness of purchases and relied upon the judgment in CIT v.

Precision Finance Pvt. Ltd. (208 ITR 465).

7. The Assessing Officer further noted that purchases from M/s Dezens Associates amounting to Rs. 3,94,447/- had already been subjected to addition in an earlier reassessment order dated 03.03.2014. In respect of the remaining two parties, namely M/s Kwality Enterprises and M/s Supreme Sales, aggregating to Rs. 5,31,723/-, the Assessing Officer treated the same as non- genuine purchases and made an addition of Rs. 5,31,723/- under section 69C of the Act. The total income was thus assessed at Rs.

63,99,760/-.

8. Aggrieved, the assessee preferred an appeal before the CIT(A). The appeal was originally filed manually on 08.07.2016 and was subsequently mig